December 20, 2019 Reply Comments of the Songwriters Guild of America, Inc. Re: Notice of Inquiry Issued by the United States

Songwriters Guild of America, Inc. 210 Jamestown Park Road Suite 100 Brentwood, Tennessee 37027-7570 615-742-9945

December 20, 2019

Reply Comments of the Songwriters Guild of America, Inc. Re: Notice of Inquiry Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018 Titled “Blanket License Implementation Regulations”

I. Introduc�on and Statement of Interest

These Reply Comments are respectfully submitted by the Songwriters Guild of America, Inc. (“SGA”), the longest established and largest music creator advocacy and copyright administrative organization in the United States run solely by and for songwriters, composers, and their heirs. Its positions are reasoned and formulated solely in the interests of music creators, without financial influence or other undue interference from parties whose interests vary from or are in conflict with those of songwriters, composers, and other authors of creative works. Established in 1931, SGA has for 88 years successfully operated with a two-word mission statement: “Protect Songwriters,” and continues to do so throughout the United States and the world.

SGA’s organizational membership stands at approximately 4500 members, and through its affiliations with both Music Creators North America, Inc. (MCNA) (of which it is a founding member) and the International Council of Music Creators (CIAM) (of which MCNA is a key Continental Alliance Member), SGA is part of a global coalition of music creators and heirs numbering in the millions. Of particular relevance to these comments, SGA is also a founding member of the international organization Fair Trade Music, which is the leading US and international advocacy group for the principles of transparency, equitable treatment, and financial sustainability for all songwriters and composers.

These Reply Comments are meant to supplement the initial comments (“Initial Comments”) filed by SGA in its submission dated November 8, 2019 (see Attachment A), the full content of which is hereby repeated and reconfirmed. The two most important points stressed by SGA in those Initial Comments were as follows:

1. The obvious and overwhelming necessity for inclusion of music creator informa�on in the Mechanical Licensing Collec�ve’s (“MLC”) musical works database; and,

2. The equally imperative necessity for robust US Copyright Office oversight of the MLC’s carrying out of its statutory duties, commitments and activities, especially regarding the identification of unmatched works and royalties.

It was originally anticipated that SGA’s Reply Comments would focus chiefly on the recommendations submitted by other individuals and organizations as part of the initial round of inquiry. Intervening events concerning the activities of the Mechanical Licensing Collective (MLC) since SGA’s initial submission, however, have caused SGA to recalibrate its focus. Due to the importance of conveying to the US Copyright Office (“USCO”) and the Librarian of Congress some of the very concerning information that has come to light over the past several weeks, SGA believes its Reply Comments must now of necessity deal principally and forthrightly with those issues rather than with the critiquing of submissions filed by its colleagues.

II. Additional, Recent Developments Illustrating the Necessity for Close Scrutiny and Oversight of the MLC by the USCO and the Library of Congress

A. The Resignation of Recording Artist/Songwriter/Music Creator Activist David Lowery from the MLC, and the Process of Replacing Music Creator Members on the MLC Board and Committees

Prior to its designation by the USCO and the Librarian of Congress as the organization that would serve as the MLC, the entity established principally by the major music publishing conglomerates and known as the NMPA/MLC conducted an extensive campaign aimed at gaining industry support for its MLC candidacy. As part of that campaign, it and its affiliated music creator and publisher organizations frequently raised the participation of recording artist/songwriter/music creator activist David Lowery on the Unclaimed Royalties Oversight Committee (“URO Committee”) as potentially the most compelling proof of the entity’s commitment to ensuring that the voice of the independent music creator would always be heard.

Throughout his career, Mr. Lowery has been an outspoken advocate for the rights and interests of musical artists and creators. His mere presence within the NMPA/MLC’s proposed Committee structure legitimized for many the group’s candidacy among independent songwriter and composer groups. Those organizations might otherwise have objected more strenuously to an entity controlled in large part by the multi-national music publishing conglomerates being designated to serve as the MLC.

On July 5, 2019, the NMPA/MLC was indeed selected as the official MLC, and Mr. Lowery was simultaneously approved to serve on its URO Committee. Within a few short weeks after that announcement, however, Mr. Lowery resigned from the URO Committee and disassociated himself from the MLC with the statement that he “lacked the bandwidth” to carry out the watchdog role he had hoped to fill. Shortly thereafter, Mr. Lowery began to publish commentaries highly critical of certain decisions and activities being carried out by the MLC

(and highly revealing of his apparent reasons for resigning), the gravity of which issues will be discussed further, below.

Mr. Lowery’s sudden and unexpected departure from the MLC and the URO Committee, however, has raised even more immediate concerns within the independent music creator community, not only as to the reasons why he might have resigned, but also over the process by which he will be replaced. It is the position of SGA that a system which would allow the MLC board of directors (consisting of ten music publisher representatives and just four music creators) to select and/or approve replacement directors and committee members on behalf of the creative community, without meaningful input from creators or approval by the Librarian of Congress and the Register of Copyrights, is an absurdity. Such an unbalanced, unchecked process would virtually guarantee the removal of what little influence actual music creators have over future MLC activities and decision-making—a result wholly inconsistent with Congressional and Executive intent (especially as regards the crucial work of the URO Committee).

As SGA pointed out in its comments to the US Copyright Office dated April 22, 2019 concerning the original designation of the MLC (see Attachment B):

With the knowledge that ‘permanently’ unmatched royalties will eventually be distributed on a market share basis to them, [the] largest music publishers will almost certainly do all they can to influence, hamstring and obscure the search process…. It will take highly experienced, non-conflicted and strongly independent-minded board members of the Mechanical [Licensing] Collective to resist this pressure, and to act in ways that fulfill their duties up to the mandated standards of fairness, transparency and accountability set forth in the Act. The necessity for those characteristics in board members is amplified by the fact that the Mechanical Collective board may even override the recommendations of its own, statutorily established Unclaimed Royalties Oversight Committee if it sees fit to do so. It thus falls to the Register of Copyrights to serve as investigator, analyst and arbiter concerning this crucial, threshold issue of appropriate board and committee member selection as part of its evaluation of the competing candidates for designation as Mechanical Collective.

In honing in on its concerns regarding that specialized duty of the Register, members of Congress took the opportunity in both the Senate and House Reports to elaborate on their expectations regarding the qualifications of board and committee members proposed for service by any Mechanical Collective candidate, and the obligation of the Copyright Office under the direction of the Register to use its own, appropriate judgement in independently evaluating and verifying the credentials of those directors and committee members proposed. That Congressional posture was undoubtedly taken to ensure that all board and committee members of the Mechanical Collective possess the proper background and abilities to execute their duties to protect the rights of creators and other interested parties without conflict, pursuant to the terms of the Act.

Specifically, the applicable section of the Senate Report reads:

The Board of Directors of the new collective is required to be composed of individuals matching specific criteria. The detailed requirements concerning the overall framework of the Board of Directors of the collective and its three committees, the criteria used to select individuals to serve on them, and the advance publication of their names and affiliations all highlight the importance of selecting the appropriate individuals. Service on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated. With the advance notification requirement, the Register is expected to allow the public to submit comments on whether the individuals and their affiliations meet the criteria specified in the legislation; make some effort of its own as it deems appropriate to verify that the individuals and their affiliations actually meet the criteria specified in the legislation; and allow the public to submit comments on whether they support such individuals being appointed for these positions. It has been agreed to by all parties that songwriters should be responsible for identifying and choosing representatives that faithfully reflect the entire songwriting community on the Board.” (emphasis added) S. Rept. 115-339 at 4-5.

The otherwise identical section of the House Report concludes on the following note:

During the entire discussion of the legislation, it has been agreed to by all parties that songwriters should be responsible for identifying and choosing the songwriter representatives on the Board. The Committee strongly agrees with such an approach. (emphasis added) H. Rept 115-651 at 5.

Further, it seems of particular importance that the Executive Branch also regards the careful, post-designation oversight of the Mechanical Collective board and committee members by the Librarian of Congress and the Register as a crucial prerequisite to ensuring that conflicts of interest and bias among such members not poison the ability of the Collective to fulfill its statutory obligations for fairness, transparency and accountability. The Presidential Signing Statement, in fact, asserts unequivocally that ‘I expect that the Register of Copyrights will work with the collective, once it has been designated, to ensure that the Librarian retains the ultimate authority, as required by the Constitution, to appoint and remove all directors.’ (emphasis added)1

Pursuant to such clear guidance from both Congress and the White House concerning the selection and replacement of music creator board and committee members, SGA urges the adoption by the USCO of regulations mandating inclusion in the MLC by-laws of a process that includes meaningful music creator participation in the selection process without music publisher interference, with further review and approval by the USCO and the Librarian of Congress of all music creator candidates for MLC board and committee service. To do otherwise would be akin to empowering the wolves to select the watchdogs that purportedly guard the sheep. And that is a result that is not only emphatically in conflict with Congressional intent, but one that is also guaranteed to produce exactly the opposite, long-term results Congress and the Executive Branch

1 Statement of President Donald J. Trump at the Signing of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act, (October 11, 2018) available at http://www.coherentbabble.com/2018-013.htm

were seeking by passage of the Music Modernization Act (“MMA”): remunerative fairness and justice for creators consistent with the principles set down in Article I, Section 8 of the US Constitution.

B. Copyright Office Review and Oversight of Controversial Activities By the MLC As Denoted By David Lowery and Others

It is well beyond the scope of these comments to delve into the details and individual administrative issues with which the MLC must deal, such as formulating contractual arrangements with outside vendors in order to effectively accomplish its statutory duties. Nevertheless, as noted above, according to independent press reports recently published by sources including former MLC Committee Member David Lowery (“MLC Selects As Digital Services Provider the Company That Sent Fraudulent License Notices to Songwriters”), certain activities of the MLC have aroused legitimate concerns in the independent music creator community that conflicts of interest are already influencing MLC decision-making (see article citations below). As SGA has urged in prior submissions, the USCO and the Librarian of Congress have been empowered under the MMA to monitor, oversee and review MLC activities, and should utilize such authority at the very least to question on an ongoing basis whether the MLC is being managed by its board members in ways consistent with such members’ fiduciary and other duties and responsibilities.

In that regard, SGA believes it is imperative to include for the record citations to three such recent publications concerning MLC activities, in order to call specific attention to the need for robust USCO oversight of issues that rise to the level of potential conflicts of interest such as self-dealing. It is, of course, up to the USCO and the Librarian of Congress to determine the criteria for its active intervention in such potentially problematic MLC matters, consistent with the statutory authority assigned to them under the law. Again, however, SGA urges that strict scrutiny of such issues, once brought to their attention by interested and informed members of the press and public, should at the very least be carefully reviewed and if necessary, investigated and acted upon. Moreover, as some commentators have suggested, the mandating of adoption by the MLC of conflict of interest policies in coordination with the USCO and the Librarian of Congress would likewise be a wise and welcome development.

The three recent, independent articles electronically appended to these Reply Comments for the review and records of the USCO and the Librarian of Congress are as follows (see Attachments C-E):

https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services-provider-the- company-that-sent-fraudulent-license-notices-to-songwriters/

https://www.digitalmusicnews.com/2019/11/27/hfa-mechanical-licensing-collective- contract/

https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish- conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html

C. Failure to Disclose Amounts of Unmatched Royalties Being Held By Digital Distributors

On December 6, 2019, the USCO held a full day MMA symposium in Washington, DC billed as the “Unclaimed Royalties Study Kickoff.” The event was attended by several dozen copyright experts and other interested parties, some of whom represented the MLC and the DLC, and many of whom participated on one or more of several organized discussion panels. At the end of the event, a representative of SGA took the opportunity to note from the podium that in the approximately seven hours of discussion, not one panelist or participant had raised a single question concerning the aggregate size of the unmatched royalty pool being held by the major digital distributors of music (the very subject of the event). The answer to that question, SGA noted, is certainly a key factor in determining the best practices for scoping the size of the problem, and for identifying and distributing such monies to their proper owners. Or it is concerning why this question was not proactively addressed during any of the day’s panels, otherwise asked, SGA asserted, let alone not answered.

SGA has time and again over the past several years posed this same question to representatives of both digital distributors and music publishers (including in private discussions that took place at the Kickoff event), and even to the USCO. Not once has the question of aggregate unmatched amounts been answered, generally because the information appears to be either willfully undetermined or is purposely being withheld by the digital distributors. Estimates have ranged from several hundred million dollars (based upon extrapolations derived from the past experiences of organizations such as SoundExchange) to a high of $1.6 billion discussed at an Austin, Texas SXSW panel in 2017 that featured representatives of NMPA and a legal representative of one of its affiliated creator groups, who appeared to quote that number.

As the MLC and DLC are well aware, the MMA requires demonstrative actions by each that will “ensure that the policies and practices of the collective are transparent and accountable.” See, Section 102(d)(3)(D)(ix)(I)(aa). SGA suggests that consistent with this requirement, the time has come to at last address the issue of how much money in unmatched royalties is being held by the digital distributors, so that the scope of this daunting problem is publicly disclosed and can be fully and effectively addressed. The community of songwriters and composers has the right to know this information, and a USCO regulation requiring its public disclosure by a date certain in the very near future is clearly warranted. SGA respectfully requests that the USCO issue such a regulation as soon as possible concerning this most basic issue of transparency and accountability as required under the MMA, regarding disclosure of unmatched withholdings both now and in the future.

D. Budgetary Earmarks in Support of Bona Fide Efforts to Identify Unmatched Royalties by the MLC

In its Initial Comments, SGA described in some detail its experience as a participant before the United States Copyright Royalty Judges of the Library of Congress’ Copyright Royalty Board (“CRB”) regarding the Determination and Allocation of Initial Administrative Assessment to Fund Mechanical Licensing Collective, CRB Docket No. 19-CRB-0009–AA. Following both

SGA’s withdrawal as a participant in those proceedings, and its subsequent submission of its Initial Comments to the USCO, on December 12, 2019 the CRB issued an order (“Order”) approving the settlement negotiated between the MLC and the DLC concerning the issue of Administrative Assessments.

In that Order, the CRB judges interestingly took note of their receipt and rejection of several comments concerning the proceedings submitted by non-parties:

The Judges have been advised by their staff that some members of the public sent emails to the Copyright Royalty Board seeking to comment on the proposed settlement agreement. Neither the Copyright Act, nor the regulations adopted thereunder, provide for submission or consideration of comments on a proposed settlement by nonparticipants in an administrative assessment proceeding. Consequently, as a matter of law, the Judges could not, and did not, consider these ex parte communications in deciding whether to approve the proposed settlement. Additionally, the Judges’ non-consideration of these ex parte communications does not: (i) imply any opinion by the Judges as to the substantive merits of any statements contained in such communications; or (ii) reflect any inability of the Judges to question, sua sponte, whether good cause exists to adopt a settlement and to then utilize all express or reasonably implied statutory authority granted to them to make a determination as to the existence, vel non, of good cause.

The above CRB statement omits, quite unfortunately, the fact that while still a participant in the proceeding, SGA (despite its withdrawal) did indeed file a motion with the CRB that included specific comments applicable to any proposed settlement negotiated between the MLC and the DLC. The September 12, 2019, SGA filing included the following clear statement by SGA on behalf of US and global independent music creators, concerning their desire to ensure justice in the eventual distribution of currently unmatched royalties:

[E]ven as it seeks to withdraw its Petition to Participate in this Proceeding, SGA respectfully implores the Judges…to make the proper funding for MLC activities specifically designed to identify the proper owners of unmatched musical compositions [and royalties] wherever they may reside in the world… one of the highest priorities of these Proceedings…. It further, respectfully requests that the Judges undertake whenever appropriate, to emphasize their intention and expectation that certain resources have been specifically provided for and must therefore be devoted to use in identifying the proper owners of such unmatched compositions and royalties by the MLC…. The clear articulation of such judicial intent, if the Judges deem it appropriate, will be enormously helpful in ensuring transparency, fairness and hopefully success in the carrying out by the MLC of its duties, a result that will be appreciated by every music creator not only in the United States, but throughout the world.” Motion to Withdraw Petition to Participate filed by SGA with CRB, September 12, 2019, Docket No. 19-CRB- 0009–AA.

The decision by the CRB judges to put aside SGA’s requests, presumably on the grounds that SGA’s withdrawal (the reasons for which are explained in SGA’s Initial Comments) negated the ability of the CRB to consider such comments, is disappointing at best. SGA, however, is

appreciative for being enabled to make the same requests of the USCO, for the same reasons articulated in its motion to the CRB and in its Initial Comments. As SGA stated:

[I]n a situation in which those who control the MLC will likely benefit from not identifying the proper owners of unmatched works (by reason of the fact that potentially hundreds of millions of dollars in royalties pertaining to ‘permanently’ unmatched works will eventually be distributed on a market share basis), every effort must be made to ensure that the search process for those rightful owners be a bona fide and sufficiently financed global effort. (emphasis added)…. Moreover, despite contrary assertions by the MLC, SGA remains unconvinced that the presence on the MLC board of a small minority of music creators (no matter how diligent and well-meaning they may be) will be able to prevent the major music publishing corporations from attempting to successfully exert undue influence. SGA is highly concerned that such multi-national conglomerates may already be seeking to diminish the MLC’s ability to secure proper financing specifically earmarked for designing and carrying out a global program to identify the proper owners of the musical compositions connected to the huge, above-referenced cache of unmatched royalties. SGA similarly doubts that the independent music publishers on the MLC board, many of whom are contractually and/or commercially tied to the major music publishers, will be sufficiently motivated to join with those few MLC songwriter board members to ensure that the rights and interests of such yet-to-be identified music creators and small publishers are properly respected.

In consideration of the foregoing, SGA once again respectfully requests that the USCO and the Librarian of Congress promulgate regulations that make clear to the MLC the expectation that a certain, adequate percentage of the MLC’s Administrative Assessment shall be devoted to undertaking a bona fide and reasonably exhaustive, global search for the rightful owners of currently unmatched royalties, as explicitly intended by Congress under the MMA.

III. The Imperative of the Librarian of Congress Acting Quickly to Appoint A New and Experienced Register of Copyrights

SGA was disappointed by the news on December 9, 2019 that Register of Copyrights Karyn Temple had made the decision to step down from her position as head of the USCO, effective immediately. However, the SGA was pleased that Dr. Hayden acted quickly and appointed Maria Strong as Acting Register. Given Ms. Strong’s breadth of experience in the Copyright Office and knowledge of copyright law, the SGA firmly believes she will adeptly lead the Copyright Office through this transition. Both Dr. Hayden and Karyn Temple shared this confidence in Ms. Strong’s ability in the press release announcing her appointment as Acting Register of Copyrights.2

The Copyright Office sits at a crucial time in the MLC oversight and MMA implementation process. It is therefore imperative that the Office act quickly and appoint a permanent register.

2 Librarian of Congress Appoints Maria Strong as Acting Register of Copyrights, Library of Congress Press Release (December 18, 2019) available at https://www.loc.gov/item/prn-19-121/librarian-of-congress-appoints-maria-strong- as-acting-register-of-copyrights/2019-12-18/

The SGA was gratified when Senators Tillis and Coons, the chair and ranking member of the Senate Intellectual Property subcommittee, wrote to Dr. Hayden urging her to promptly appoint the next permanent register and offered to assist the Librarian of Congress in selecting an appropriate replacement for Ms. Temple. (See Attachment F).

In light of the many sensitive issues outlined in its Initial and Reply comments, however, SGA would like to take this opportunity to respectfully urge that any candidates selected as permanent Register be especially knowledgeable about and sympathetic to the needs and Constitutionally- based rights of the creator and author community. Such person should also, quite naturally, be without conflicts of interest in regard to prior service on behalf of digital distributors, big tech, and/or corporate copyright owners, and all of their respective trade associations. We are confident that Dr. Hayden and her Library of Congress staff, in coordination with Congress, will be enabled to find a number of qualified candidates who satisfy these criteria, and who will lead the USCO forward into a future in which the implementation of the MMA will prove a resounding positive for all US and global music creators.

IV. Conclusion

SGA thanks the US Copyright Office and the Librarian of Congress for their careful concern regarding protection of the rights and interests of songwriters and composers under the MMA, and for the opportunity to respectfully submit these Reply Comments. SGA further looks forward to providing more of its insights and suggestions in its future submissions, and will gladly respond to any further questions regarding MMA implementation and proceedings.

Respectfully submitted,

______Rick Carnes President, Songwriters Guild of America, Inc.

December 20, 2019 cc: Charles J. Sanders, Outside Counsel Members of the SGA Board of Directors

CFC:sga Encl.

9 ATTACHMENT A Songwriters Guild of America, Inc. 210 Jamestown Park Road Suite 100 Brentwood, Tennessee 37027-750 615-742-9945

November 8, 2019

Comments of the Songwriters Guild of America, Inc. Re: Notice of Inquiry Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018 Titled “Blanket License Implementation Regulations”

I. Introduction and Statement of Interest

These comments are respectfully submitted by the Songwriters Guild of America, Inc. (“SGA”), the longest established and largest music creator advocacy and copyright administrative organization in the United States run solely by and for songwriters, composers, and their heirs. Its positions are reasoned and formulated in the interests of music creators, without financial influence or other undue interference from parties whose interests vary from or are in conflict with those of songwriters, composers, and other authors of creative works. Established in 1931, SGA has for 88 years successfully operated with a two-word mission statement: “Protect Songwriters,” and continues to do so throughout the United States and the world.

In addition to its comments today concerning the promulgation of blanket license implementation regulations under the Music Modernization Act (“MMA”), SGA also intends to file reply comments in response to the submissions of other, directly involved parties concerning the more technical aspects of the new blanket licensing regime, such as regulations regarding notices of license, notices of non-blanket activity, usage reports and adjustments, database usability, interoperability, and usage restrictions, conflicts of interest and the handling of confidential information. In its comments submitted today, however, SGA will for the sake of emphasizing the unique importance of the issues, focus upon only two principle objectives crucial to protecting the interests of the music creator community:

A. The obvious necessity for inclusion of music creator information in the mechanical licensing collective’s (“MLC”) database; and,

B. The necessity for robust US Copyright Office oversight of the MLC’s duties, commitments and activities regarding the identification of unmatched works.

II. The MLC Database Must Include Complete Music Creator/Songwriter Information

The establishment of a complete and accurate musical works database by the MLC has been recognized as the sine qua non for the success of the new blanket licensing system mandated under the Music Modernization Act. As the MMA Senate Report makes clear, “the failure of the music industry to develop and maintain a master database has led to significant litigation and underpaid royalties for decades. This situation must end so that all artists are paid for their creations and that so-called ‘black box’ revenue is not a drain on the success of the entire industry.” Senate Report 115-339 at 8.

Section 102(3)(E) of the MMA therefore sets forth in detail the methodology to be utilized in setting up the music works database, the process of populating the database with complete and accurate information, the accessibility of the database to various interested parties and the public, and other essential elements necessary to maximize its usefulness as the key tool in ensuring the proper payment of royalties due on individual musical compositions to music creators and their administrators or agents.

Almost inexplicably, however, while including a long list of elements to be included in the new database, the MMA omits specific mention of perhaps the most immutable and essential information (other than the title) to the identification of works and their owners: the name(s) of the music creators. Those two bedrock elements of identification and attribution --title and creator(s)-- must be present in any information system designed to effectively function as the music industry’s “master database” of musical works.

While the names of copyright owners and administrators associated with a musical work may change on a constant basis, and other variables and data points are subject to frequent

2 adjustment, the title and the names of the creators never vary from the date of a work’s creation forward. It is no exaggeration to say, therefore, that the failure to mandate the inclusion of the name(s) of a musical work’s creator(s) in the database would infuse within it a flaw so significant as to almost guarantee a shortfall in any results the MMA is seeking to achieve in creating an improved licensing environment.

Article I Section 8 of the US Constitution grants to Congress the authority to fashion laws to grant rights to and protect authors and inventors, the human beings responsible for the acts of creation that so benefit society and culture. The concept that the rights and protections of creative works fundamentally accrue to creators was later adopted in whole under international treaties that include the Berne Copyright Convention and the Universal Declaration of Human Rights, both of which include the US as a key signatory. The creators’ right of attribution, currently under review by the US Copyright Office in relation to the concept of moral and ethical rights within intellectual property regimes, may soon result in a formal and specific codification of such an attribution right under Title 17, the US Copyright Act. Under such facts and circumstances, what logical rationale can possibly be utilized to marginalize or eliminate the necessity for inclusion of creators’ names in the musical works database? SGA can think of none.

Perhaps in anticipation of just such a situation, the MMA specifically grants to the Register of Copyrights in Section 102(3)(E) the authority to add mandatory data points as to both matched and unmatched works for inclusion in the database by providing with specificity that “the musical works database shall include…such other information relating to the identity and ownership of music works (and shares of such works) as the Register of Copyrights may prescribe by regulation.” In light of the foregoing, SGA therefore respectfully urges the immediate addition of creators’ names to the list of mandated data points necessary for inclusion in the musical works database at the threshold of its establishment, and at all times thereafter. To do otherwise would be a grave disservice to the entire, global community of music creators, but most especially to those American songwriters, lyricists and composers most heavily reliant on the Constitutionally-encouraged protection of their incomes and reputations in the United States through the proper identification and attribution of their works.

III. There must be robust oversight by appropriate US Government agencies concerning the disposition of unmatched royalties by the MLC

Following a recent Senate Oversight Hearing concerning US Copyright Office matters, former Judiciary Committee Chairman Charles Grassley noted for the record that “[t]he success of the Music Modernization Act (MMA) will depend, to a large extent, on the effective and efficient operation of the Mechanical Licensing Collective (MLC). The MMA included provisions to ensure

3 that there was robust ongoing oversight of the MLC by both the Copyright Office and Congress, and that the new MLC would be accountable to the stakeholders.”1

With that principle in mind, during the summer of 2019 SGA duly filed a Petition to Participate before the United States Copyright Royalty Judges of the Library of Congress’ Copyright Royalty Board (“CRB”) to appear as an interested party in proceedings to determine funding allocations for the MLC. SGA’s stated purpose in doing so was to ensure that the voice of the independent music creator community could be heard on the issue in support of the importance of providing adequate funding to the MLC to enable fulfillment of its statutory duties, especially in regard to allocations specifically earmarked by Governmental oversight bodies for initiatives to properly identify ownership of potentially hundreds of millions of dollars in unmatched royalties presumable belonging in large part to songwriters and composers unaffiliated with major publishing corporations. SGA was the only such organization to petition for participation, along with a single other individual.

In its Petition to Participate, SGA readily admitted it was not a copyright owner, but rather the administrator and agent for the rights of a substantial number of its highly accomplished copyright owner members and in some cases, the estates of equally distinguished deceased members, the owners of some of the world’s most beloved musical compositions. In each case, the owners delegated to SGA the authority to exercise rights in the compositions (including mechanical rights). The MLC, apparently supported by the Digital Licensing Coordinator (“DLC”) (together the only two other participants in the proceedings) elevated form over substance and immediately moved to bar SGA’s participation on the grounds that SGA was admittedly not itself a copyright owner and therefore not a properly interested party under a narrow interpretation of the wording of the MMA statute and related CRB notices. (The MLC similarly moved on other grounds to bar the other individual party from the proceeding, and was successful in doing so).

Rather than engage in a protracted and expensive fight before the CRB in favor of an expansive rather than a small, strictly literal reading of the term “copyright owner,” potentially pitting music creators against music publishers in a proceeding pertaining to issues about which they were far more beneficially aligned as colleagues rather than as adversaries, SGA chose instead to withdraw voluntarily from the proceeding by filing a Notice of Withdrawal on September 12, 2019. SGA, however, sought in doing so to articulate its increasing unease over the pending process to identify unmatched royalties, and to raise concerns before that tribunal that it believes are equally pertinent and appropriate for inclusion in its present Comments:

SGA would be remiss not to repeat its…profound concern over this situation --as previously noted in its September 6, 2019 Response (“Response”) objecting to the MLC’s

1 See Attachment A, Chris Castle, Should the Copyright Office’s Best Practices Shine Sunlight on the Unmatched? (Music Technology Policy), November 5, 2019. available at https://musictechpolicy.com/2019/11/05/should-the- copyright-offices-best-practices-shine-sunlight-on-the-unmatched/

4 motion to bar it from these Proceedings-- in the respectful hope that the issue will be appropriately addressed by the Judges despite SGA’s withdrawal.

In its Response, SGA noted that it viewed the MLC motion as “especially alarming in light of the fact that SGA has made clear to MLC that a [significant] focus of its activities as a participant in these Proceedings will be to advocate for the principle that allocations to the MLC must be sufficient for it to fulfill its mandate to mount a robust, global search for the true owners of unmatched works, as well as to fulfill its other statutory duties.”

SGA made clear in that same Response the reason for such alarm: “[I]n a situation in which those who control the MLC will likely benefit from not identifying the proper owners of unmatched works (by reason of the fact that potentially hundreds of millions of dollars in royalties pertaining to ‘permanently’ unmatched works will eventually be distributed on a market share basis), every effort must be made to ensure that the search process for those rightful owners be a bona fide and sufficiently financed global effort. (emphasis added) Why the MLC would move to exclude SGA from discussions relating to this issue under such circumstances is a question of great concern to SGA, and it believes, to the entire music creator community.”

Moreover, despite contrary assertions by the MLC, SGA remains unconvinced that the presence on the MLC board of a small minority of music creators (no matter how diligent and well-meaning they may be) will be able to prevent the major music publishing corporations from attempting to successfully exert undue influence. SGA is highly concerned that such multi-national conglomerates may already be seeking to diminish the MLC’s ability to secure proper financing specifically earmarked for designing and carrying out a global program to identify the proper owners of the musical compositions connected to the huge, above-referenced cache of unmatched royalties. SGA similarly doubts that the independent music publishers on the MLC board, many of whom are contractually and/or commercially tied to the major music publishers, will be sufficiently motivated to join with those few MLC songwriter board members to ensure that the rights and interests of such yet-to-be identified music creators and small publishers are properly respected.

As such, even as it seeks to withdraw its Petition to Participate in this Proceeding, SGA respectfully implores the Judges…to make “the proper funding for MLC activities specifically designed to identify the proper owners of unmatched musical compositions [and royalties] wherever they may reside in the world… one of the highest priorities of these Proceedings.” (Response at 3). It further, respectfully requests that the Judges undertake whenever appropriate, to emphasize their intention and expectation that certain resources have been specifically provided for and must therefore be devoted to use in identifying the proper owners of such unmatched compositions and royalties by the MLC. (emphasis added) The clear articulation of such judicial intent, if the Judges deem it appropriate, will be enormously helpful in ensuring transparency, fairness and hopefully success in the carrying out by the MLC of its duties, a result that will be

5 appreciated by every music creator not only in the United States, but throughout the world. Motion to Withdraw Petition to Participate filed by SGA with CRB, September 12, 2019, Docket No. 19-CRB-0009–AA.

Further in pursuit of the equitable results it is seeking in regard to identification of the proper owners of hundreds of millions of dollars in currently unmatched royalties, SGA hereby repeats and re-emphasizes those same concerns to the US Copyright Office that it expressed to the CRB. Moreover, SGA respectfully urges the Register of Copyrights and the US Copyright Office to exercise the expansive oversight authority granted to them under the MMA to mandate the undertaking through the institution of best practices, bona fide and easily reviewable efforts by the MLC to identify as great a percentage of the proper owners of unmatched royalties and titles as possible.

SGA similarly urges that the suggestions and comments set forth in the short article entitled “Should the Copyright Offices Best Practices Shine Sunlight on the Unmatched” (appended hereto by the permission of its author, attorney and music industry commentator Christian Castle as Attachment A) be fully and carefully considered by the Register and the US Copyright Office in framing best practice rules.

IV. Conclusion

SGA thanks the US Copyright Office and the Register of Copyrights for their careful concern regarding protection of the rights and interests of songwriters and composers under the MMA, and for the opportunity to respectfully submit these comments. SGA further looks forward to providing more of its insights and suggestion in its future reply comments, and will gladly respond to any further questions regarding these and other submissions regarding MMA implementation and proceedings.

Respectfully submitted,

______Rick Carnes President, Songwriters Guild of America, Inc.

November 8, 2019

6 cc: Charles J. Sanders, Outside Counsel Members of the SGA Board of Directors

CFC:sga Encl.

7 Attachment A

Should the Copyright Office’s Best Practices Shine Sunlight on the Unmatched?

November 5, 2019 Chris Castle

The Music Modernization Act is a litigation magnet because of its failure to mandate a wholistic solution to the controversial black box. There are two commercially available systems that can address the problem.

We’ve all heard that the digital music services are sitting on a pile of cash in unmatched statutory mechanical royalties also known as the “black box”. No one knows how much because Title I of the Music Modernization Act does not require them to disclose the unmatched sums being held as of the enactment date (October 11, 2018–a year ago), much less a bring down of the current amount. And unsurprisingly, no service has voluntarily disclosed how much they are holding.

One may ask, why can’t you just look up on the financial statements of at least the public companies how much they are accruing for their share of the black box? Good luck with that.

The monies owed to the unmatched “known unknowns” is probably the number one question the services don’t ask their third party reporting agents. And because of the well-known agency principle that “notice of a fact that an agent knows or has reason to know is imputed to the principal if knowledge of the fact is material to the agent’s duties to the principal,” these services likely know as a matter of law how much is in their principals’ respective black boxes or at least what they couldn’t match. (Restatement (Third) of Agency Sec. 5.03.)

Fortunately, the Copyright Office is tasked with establishing best practices for distributing these unmatched black box monies through regulations to implement these and other provisions of the Music Modernization Act, such as the late fee for non-compliant services.

The Copyright Office has also announced the “kick off” of its study of unclaimed royalties study to be held in Washington, DC on December 6. This will be great for Washington area songwriters, as well as convenient for the lobbyists and lawyers, but everyone else will have to wait for the transcript and video which unfortunately (and perhaps incredibly) will not be live streamed. Even so, these pending regulations and the upcoming mandated study on matching are the best chance songwriters have had for a generation to get a straight count on unmatched mechanicals.

There are two currently existing standards that the Copyright Office can reference for examples of industry best practices-the SoundExchange unclaimed royalty search for new members and the Lowery-Ferrick Spotify class action Songclaims portal powered by Crunch Digital. It seems inescapable that these claiming standards should be guideposts for both the Copyright Office and the Copyright Royalty Judges.

Having such clear cut standards–already operational so not theoretical–is fortunate because it seems obvious that the Congress is both concerned with the black box distributions not being gamed and also intends to exercise its statutory authority to retain oversight over the Mechanical Licensing Collective’s

8 operations. In fact, Senator Grassley specifically stated in his questions for the record following the Copyright Office oversight hearing that:

The success of the Music Modernization Act (MMA) will depend, to a large extent, on the effective and efficient operation of the Mechanical Licensing Collective (MLC). The MMA included provisions to ensure that there was robust ongoing oversight of the MLC by both the Copyright Office and Congress, and that the new MLC would be accountable to the stakeholders.”

This is in addition to the oversight role of the Copyright Royalty Judges with respect to the Administrative Assessment and at least budgetary aspects of the MLC’s operations that inevitably will turn the quantitative into the qualitative.

During her July 30 testimony at the Copyright Office oversight hearing of the House of Representatives Committee on the Judiciary, Register of Copyrights Karyn Temple was peppered with questions about the black box from Members of the Committee, including Representatives Ted Deutch, Sheila Jackson-Lee and Chairman Jerry Nadler.

These months after the hearing, the gravamen of the Committee’s questions were crystalized in yet another copyright infringement suit brought against Spotify, this time by Eminem’s publishers. The key theory of the suit is that Spotify is out of compliance with the conditions for the new safe harbor for copyright infringers that is one of the central themes of the MMA. The Copyright Office can use the complaint as another guidepost for best practices to be compassed by their new regulations.

As drafted, Title I is an invitation for litigation, so it should be no surprise that the independent publishing community stepped forward to sue as that was the only way to find out what was going on behind the curtain. However, as Senator Grassley emphasized, Congress charged the Copyright Office to establish regulations to implement Title I and gave the Copyright Royalty Judges a de facto oversight role through their approval of the MLC’s budget.

1. Copyright Office Regulations The Copyright Office is in the process of drafting regulations for a number of areas in Title I. The Copyright Office therefore is in a unique position to avoid a maelstrom of litigation by adopting regulations that shine light on the unmatched, recognize industry practices by SoundExchange and Crunch Digital, and accomplish simple goals. This is not hard.

Regulations should require iterative public disclosure to accompany the iterative matching required by Title I. Remember-many of these services are the biggest, smartest and richest companies in the history of commerce. They know something about these systems as they all have to one degree or another developed significant in-house expertise.

However, it is crucial to have the unmatched actually administered by an unrelated and trusted infomediary. This could be done by repurposing existing searchable databases for unclaimed funds while simultaneously disclosing to the public the amounts owed for each song.

Balance the Checkbook: Immediate Public Release of Trial Balance and Monthly Updates of Unmatched Each service currently participating in the Initial Administrative Assessment proceeding before the Copyright Royalty Judges should disclose an aggregate trial balance of the total sums they are holding in their respective unmatched accounts. This total number should be made public as well as the methodology used to calculate it. Nothing should or needs to be redacted.

9 The services should update that initial disclosure on a monthly basis. The monthly calculation should show the month’s starting balance of unmatched royalties, how much was paid out during the month, how much was added during the month, and the remaining balance at the end of the month. This simple calculation would allow songwriters to know what monies were being held with no intermediaries. It’s as simple as balancing a checkbook.

Unmatched Lookup If the services know the total sums, they should also be able to disclose the sound recording titles at least, if not the artist names, ISRCs, other metadata for the recordings of the songs that comprise the totals. These services should be able to provide a simple web-based look-up so that songwriters could know if their songs are included in a service’s unmatched accrual.

Cost Reimbursement It is becoming increasingly obvious to independent publishers that there will be significant resources and costs required to deliver their data to the MLC and claim their unmatched. Those transaction costs of delivering data to the MLC-without which the imagined global rights database would not be functional enough to distribute the black box effectively-are incremental to publishers who have been doing business prior to the MMA and the MLC.

These incremental costs are easily identifiable and should be invoiced to the MLC by rights owners to be included in the next administrative assessment and reimbursed by the services.

Future Licensees Any future licensee (blanket or nonblanket) should also be required to comply with these obligations and disclosures.

2. Role of the Copyright Royalty Judges The Copyright Royalty Judges are currently conducting a proceeding to establish the initial “administrative assessment” for the MLC. The rules of the proceeding require the MLC and the Digital Licensee Coordinator to attempt to reach a voluntary agreement on the amount of the assessment. If they fail, the CRJs will determine it for them. The voluntary negotiation is divided into two periods: July 8 to September 6, and then September 7 to January 28.

The parties have failed to reach an agreement in the first period already, so a very basic assessment of probabilities means there’s less than a 50% chance they will agree during the second period. If they fail to reach an agreement by February 17th, the CRJs will commence a hearing to reach the decision for them. (One could argue that the likelihood of a voluntary agreement increases with the passing of time, but that doesn’t seem to be the case at this point-it seems to be going the opposite direction.)

Remember-the MLC is supposed to have their imagined global rights database up and running and be fully operational and able to render statements shortly after January 1, 2021, or a little over 14 months from now. At this point, it seems that there is a greater than 50% probability that Congress will have to amend the MMA to extend the deadline. Presumably something has happened in the last year to advance the ball.

Crucially, there is an inextricable link between the amount of the administrative assessment and what the MLC intends to do with the money. Two of those functions will be (1) the MLC’s own efforts at matching whatever is unmatched when the Digital Licensee Coordinator delivers the unmatched accounts (and presumably transaction logs) from the services to the MLC after January 1, 2021, and (2) ingesting data for the imagined global rights database.

Unmatched Best Practices and Disclosures The CRJs should take a very close look at both the startup and the operating budget for the MLC as well as the underlying assumptions, processes and vendors for those functions to take on the U.S. accounting burden for the entire world. It should be obvious that the services have a great deal of experience in licensing copyrights and operating royalty systems.

The CRJs should also consider whether they have the authority to address the nexus between the best practices to be adopted by those seeking to rely on the retroactive safe harbor, payments of the newly matched prior to 1/1/21 and public reporting of both accrued unmatched royalties and claiming before and after 1/1/21. I think they do and they probably have an obligation to do so that is at least as great as the obligation on the Copyright Office.<

Sufficiency of Funding and Sufficiency of Allocation As Senator Grassley has asked, the CRJs need to address what happens if the process fails to hit the deadlines as part of their determination of the administrative assessment. Each passing day makes it more likely that the entire procedure will grind to a halt before statements can be rendered.

This concerns both the DLC funding the MLC sufficiently, but it also depends on the MLC allocating those sums appropriately across its operations–and the quantitative implies the qualitative. Moreover, the CRJs need to fashion a procedure for relief that can be taken up inexpensively by any copyright owner that has a good faith belief they have simply not been accounted to. An example would be someone who was being paid under a statutory license (NOI or modified compulsory) prior to January 1, 2021 whose statements then drop to zero thereafter or who simply receive no statements at all.

While the Register said in response to Rep. Deutch during the Copyright Office oversight hearing that both MLC and AMLC had agreed with the Copyright Office interpretation that unclaimed funds are not to be distributed before 2023, the MLC’s actual statement on the issue is more nuanced. The judges need to take this into account and leave nothing to the imagination in their determination.

3. Sunlight is the Best Disinfectant As Mr. Justice Brandeis taught us in Other People’s Money-And How Bankers Use It,“sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”

Songwriters are in need of both.

11 ATTACHMENT B

Contact: Songwriters Guild of America, Inc. 210 Jamestown Park Road Suite 100 Brentwood, Tennessee 37027-750 615-742-9945

April 22, 2019

Comments of the Songwriters Guild of America, Inc. Re: Notice of Inquiry Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018 (Pub. L. 115-264) Titled “Designation of Mechanical Collective”

I. Introduction and Summary

These comments are respectfully submitted by the Songwriters Guild of America, Inc., the longest established and largest music creator advocacy and administrative organization in the United States run solely by and for songwriters, composers, and their heirs. Established in 1931, SGA has for 88 years successfully operated with a two-word mission statement: “Protect Songwriters,” and continues to do so throughout the United States and the world.

SGA’s organizational membership ranges between 3500 and 5000 members, and through its affiliations with both Music Creators North America, Inc. (MCNA) (of which it is a founding member) and the International Council of Music Creators (CIAM) (of which MCNA is a key Continental Alliance Member), SGA is part of a global coalition of music creators and heirs numbering in the millions. Of particular relevance to these comments, SGA is also a founding member of the international organization Fair Trade Music, which is the leading US and international advocacy group for the principles of transparency, equitable treatment, and financial sustainability for all songwriters and composers.

SGA acted independently, but also often together with many of its MCNA, CIAM and Fair Trade Music colleagues, in advocating for the passage of the Musical Works Modernization Act of 2018 (MMA) throughout the entire legislative process. During that time, however, SGA also worked for the inclusion of amendments to make the Act more equitable for the music creators who, under the US Constitution, are the intended beneficiaries of the legislation.1 Some of those

1 https://www.tennessean.com/story/money/2018/01/05/landmark-songwriting-bill-gains-momentum- songwriters-guild-association-raises-concerns/1007240001/

1 efforts, such as singularly gaining greater representation for songwriters and composers on the board of the Mechanical Collective to be established under the Act (from two songwriters to four), and arguing for clarification in the Act’s Legislative History that music creators are due the full benefit of their publishing agreement splits in the distribution by music publishers of so- called “unmatched royalties,” were successful.

Other efforts, such as our vigorous attempt to gain equal board representation for songwriters and composers on the Mechanical Collective board, were neither joined nor fully realized. In that regard, SGA wishes to note for the record that unfortunately, like many other independent creative and music publishing community organizations, it was generally excluded from taking part in the closed-door legislative negotiation process organized by the National Music Publishers Association, Inc. (NMPA), which gave deference only to its own, affiliated and/or controlled music creator groups. SGA took the alternative route of organizing visits to members of Congress on its own, but was principally and consistently rebuffed regarding its requests to regularly participate in meetings and discussions concerning the legislative negotiation and drafting process, with the principle exceptions being a short industry meeting in New York, and brief legislative discussions with NMPA that were organized by the US Copyright Office itself, for whose efforts in that regard SGA is extremely grateful.

Following the enactment of the legislation, NMPA and its affiliated music creator groups began assembling various music industry committees to consider implementation issues, leading to the establishment of the non-profit organization now generally referred to as the NMPA Music Licensing Collective (NMPA/MLC). Despite being invited to participate on the NMPA/MLC music creator advisory committee (although several SGA candidates were rejected for service on the committee without explanation or reason), SGA continued to be rebuffed in its efforts to ensure inclusion, transparency, diversity, and non-conflicted consideration of music creator issues and protections even as its representatives participated in committee meetings.

SGA’s request to establish a conflict of interest committee policy, for example, was rejected outright, even after SGA’s offer to the committee to draft such a policy and accompanying pledge for its consideration. The NMPA/MLC music creator advisory committee chose instead to implement a non-disclosure requirement concerning its activities and deliberations, to which SGA objected as being antithetical to the spirit of transparency and accountability mandated under the Act.

By its comments in this regard, SGA does not wish to denigrate the positive work in which NMPA and its affiliated music creator groups may or may not be otherwise engaged in alignment with SGA. As to issues concerning the MMA, however, cooperation by the NMPA/MLC has been less than what SGA had hoped for and anticipated.

SGA does wish to note that so far as concerns the group known as the American Music Licensing Collective (AMLC), SGA’s consultations on similar issues of inclusion, transparency, diversity and non-conflict have been welcomed. Prior to consulting with AMLC on such matters, it should be noted that SGA discussed the matter with the US Copyright Office, and received assurances that it would not constitute a conflict of interest for SGA to work with both the NMPA/MLC and the AMLC in attempting to ensure that each group would build an

2 organization wholly responsive to the need of music creators to have their rights and interests protected without bias or conflict under the MMA.

The AMLC thereafter responded, in fact, by inviting SGA President Rick Carnes to serve as a music creator representative on its board, along with other songwriter and composer members affiliated with MCNA and the international music creators’ group CIAM. This latter point appears to be an especially important reflection of AMLC’s global view concerning its outreach obligations, in light of the fact it has been widely reported that a very large percentage of the unmatched royalties the designated Mechanical Collective will be charged with identifying and distributing likely belong to composers and songwriters residing outside of the United States.

Similarly, AMLC has signed a pledge to conduct itself, if designated as the Mechanical Collective, in ways consistent with Fair Trade Music principles in all cases not in conflict with its statutory obligations. The NMPA/MLC has neither supported the inclusion of international music creators on its board (and in fact rejected at least one eminently qualified international candidate), nor signed similar pledges to abide by Fair Trade Music principles.

Nevertheless, as will be discussed below, SGA is far more concerned with ensuring that music creator rights are fully protected against conflicts of interest and impingements upon the rights and interests of songwriters and composers under all circumstances, than in supporting one or the other candidate vying to be selected as the Mechanical Collective. Others in the music creator community are choosing to voice opinions in this regard, including a founding member of one of NMPA’s affiliated songwriter groups, and SGA urges the Copyright Office to consider all such opinions based upon the facts.2 SGA’s comments, however, will deal principally with issues of fairness and equitable administration, payment, and oversight, rather than with statements of support for or opposition to one or the other of AMLC or NMPA/MLC. SGA trusts in the Copyright Office to make the correct decision as to which group is best suited to protect the artistic creators whom the Act is primarily intended to serve, and seeks only to assist the Copyright Office in coming to the most informed and equitable decision in that regard.

Further, as part of that process herein, SGA will also endeavor to point out instances in which the Copyright Office is well-positioned to address and institute various checks and balances permissible within the statute, to ensure as thoroughly as possible that the rights and interests of creators are protected. That principle is, has always been, and should always be, the central mandate of both SGA and the United States Copyright Office. It is also the reason why Congress has entrusted the US Register of Copyrights and the Librarian of Congress to perform the crucial threshold tasks before them, investing in them the broad authority and latitude to ensure, through independent investigation and analysis, that the entity eventually designated to serve as the Mechanical Collective is led only by those dedicated to and capable of carrying out that protective mandate for songwriters and composers.

II. Discussion

A. The Fundamental Basis of All US Copyright Legislation

2 https://www.digitalmusicnews.com/2019/04/18/sona-mlc-amlc-statement/

For centuries, it has remained an immutable legal principle that it is protections for the rights of creators that are recognized in the United States and throughout the world as the basis for the encouragement and advancement of art, culture and civic life. Virtually every modern law and treaty enacted in the sphere of artistic and intellectual property rights focuses on this same principle: in order to serve the greatest interests of both individuals and societies, it is the rights of the creators of intellectual property that must be legally, commercially, and ethically protected. Those laws and treaties include The United Nations Universal Declaration of Human Rights to which the United States is an original signatory, the Berne Copyright Convention of which the United States is a signatory, and most importantly for the purposes of this legislation and these comments, the United States Constitution (including Article I, Section 8, which establishes the right of Congress to enact intellectual property laws for the principle purpose of “promoting the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”).

With that principle in mind, Congress cited Article I, Section 8 as the basis of its authority to enact the MMA, principally for the benefit of music creators, and invested in the US Register of Copyrights and the Librarian of Congress broad responsibility and authority to oversee the MMA implementation process. SGA, as the result of its detailed discussions with the Copyright Office throughout the legislative process, is confident that the Librarian and the Register grasp the weight of this responsibility, and will take into full account the need to act independently and wisely in the investigation and analysis of the candidates competing for selection as the Mechanical Collective (and their board and committee members) with the best interests of creators as its primary focus.

B. The Role of the US Register of Copyrights and the Librarian of Congress Under the MMA

In line with the foregoing, Section 102(d)(3)(A) of the MMA sets forth the specific but expansive criteria to be utilized by the US Register of Copyrights in designating which competing, non-profit entity is to serve as the US Mechanical Collective with the approval of the Librarian of Congress.

Among the three most important of these criteria are those which provide that the entity seeking designation must:

(i) “[have been] created by copyright owners to carry out responsibilities under this subsection,” which prominently include “ensur[ing] that the policies and practices of the collective are transparent and accountable.” See, Section 102(d)(3)(D)(ix)(I)(aa);

(ii) “[be] endorsed by, and enjo[y] substantial support from, musical work copyright owners that together represent the greatest percentage of the licensor market for uses of such works in covered activities, as measured over the preceding 3 full calendar years”; and,

4 (iii) “[be] able to demonstrate to the Register of Copyrights that the entity has, or will have prior to the license availability date, the administrative and technological capabilities to perform the required functions of the mechanical licensing collective.”

Moreover, in further clarifying its intention that the US Copyright Office, the Register and the Librarian are fully authorized and encouraged to engage in independent investigation and analysis in determining which candidate is to be designated as the Mechanical Collective under the foregoing general criteria, Congress also provided in Section 102(d)(3)(B)(bb) that the Register is to publish the “reasons for the designation” (emphasis added), in order to permit public and industry review of the determination, and to allow for appeal if appropriate. The House and Senate Reports concerning the legislation fully support this principle, as will be discussed below.

C. Transparency and Accountability—Especially Regarding Unmatched Royalties

As to the first criterion set forth in the prior section above, transparency and accountability, Congress had reasons for serious concern that certain inherent conflicts created by the MMA would require particularly intensive scrutiny of the Mechanical Collective at both the threshold of its designation, and over the later performance of its duties. The most obvious of these conflicts concerns the role of the Mechanical Collective in seeking to identify the rightful owners of hundreds of millions of dollars in unmatched royalties that will shortly be turned over to the Collective for identification and distribution. SGA has endeavored over a period of many months to ascertain from various, knowledgeable sources (including the US Copyright Office) the exact amount of unmatched royalties that are currently being held by digital music distributors, but has not yet secured a demonstrably accurate answer. Estimates, however, have ranged from several hundred million dollars to a high of $1.6 billion, and far more unmatched royalties will be arriving at the Mechanical Collective over future years.

Regardless of the actual amounts being held, following its designation by the Register and the Librarian, it will be up to the Mechanical Collective to engage in various outreach and analytic activities in an attempt to identify the rightful owners of this huge cache of “black box” royalties, in an effort to pay all of those monies to the proper recipients. In the event such rightful owners cannot be definitively determined and located by the Collective, however, the royalties belonging to those as yet unidentified parties (most of whom are likely to be independent songwriters) will then be distributed on a market share, title by title basis under the Act to music publishers, the largest among whom will receive the major portions of monies that knowingly do not otherwise belong to them.3

3 It is worth noting further that those music publisher recipients of unmatched royalties will then be on their honor to notify their affiliated music creators that such royalties have been received, and obligated under the law to pay the creators according to their contracts as if such monies had been reported on a title by title basis in the normal course (or at a minimum rate of fifty percent, whichever amount is higher). How this downstream payment process will work effectively remains to be seen, a subject that will be addressed in greater detail later in these comments.

5 Under such circumstances, the board of the Mechanical Collective is likely to be placed under enormous pressure from major music publishers to limit its search for the rightful of owners of these hundreds of millions of dollars in black box royalties. With the knowledge that “permanently” unmatched royalties will eventually be distributed on a market share basis to them, those largest music publishers will almost certainly do all they can to influence, hamstring and obscure the search process.4 At the same time, those large publishers will ironically also likely decline to utilize the Mechanical Collective for their mechanical licensing services, choosing instead to negotiate direct deals and payments with digital music distributors.

It will take highly experienced, non-conflicted and strongly independent-minded board members of the Mechanical Collective to resist this pressure, and to act in ways that fulfill their duties up to the mandated standards of fairness, transparency and accountability set forth in the Act. The necessity for those characteristics in board members is amplified by the fact that the Mechanical Collective board may even override the recommendations of its own, statutorily established Unclaimed Royalties Oversight Committee if it sees fit to do so. It thus falls to the Register of Copyrights to serve as investigator, analyst and arbiter concerning this crucial, threshold issue of appropriate board and committee member selection as part of its evaluation of the competing candidates for designation as Mechanical Collective.

Specifically, the applicable section of the Senate Report reads:

“The Board of Directors of the new collective is required to be composed of individuals matching specific criteria. The detailed requirements concerning the overall framework of the Board of Directors of the collective and its three committees, the criteria used to select individuals to serve on them, and the advance publication of their names and affiliations all highlight the importance of selecting the appropriate individuals. Service on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated. With the advance notification requirement, the Register is expected to allow the public to submit comments on whether the individuals and their affiliations meet the criteria specified in the legislation; make some effort of its own as it deems appropriate to verify that the individuals and their affiliations actually meet the criteria specified in the legislation; and allow the public to submit comments on whether they support such individuals being appointed for these positions. It has been agreed to by all parties

4 The same temptation, in fact, may also be attributed to those smaller publishers that had major hits during the accounting periods in question. The potential influence of those independent parties, however, will be far more limited than that of the major, multi-national music publishing conglomerates that today more than ever before seem willing to exert market pressure to achieve economic benefits to which they may not be entitled.

6 that songwriters should be responsible for identifying and choosing representatives that faithfully reflect the entire songwriting community on the Board.” (emphasis added) S. Rept. 115-339 at 4-5. 5

The otherwise identical section of the House Report concludes on the following note:

Further, it seems of particular importance that the Executive Branch also regards the careful, post-designation oversight of the Mechanical Collective board and committee members by the Librarian of Congress and the Register as a crucial prerequisite to ensuring that conflicts of interest and bias among such members not poison the ability of the Collective to fulfill its statutory obligations for fairness, transparency and accountability. The Presidential Signing Statement, in fact, asserts unequivocally that “I expect that the Register of Copyrights will work with the collective, once it has been designated, to ensure that the Librarian retains the ultimate authority, as required by the Constitution, to appoint and remove all directors.”7

SGA regards it as a significant red flag that the NMPA-MLC submission to the Copyright Office devotes the equivalent of ten full pages of text principally in attempting to refute this governmental oversight authority, and regards the expression of such a position by NMPA/MLC as arguably indicative of an organization more inclined towards opaque, insider management control than one devoted to fairness, transparency and accountability.8 AMLC’s submission appears to be silent on this point.

Specific SGA Recommendations Concerning the Issues of Fairness, Transparency and Accountability

With all of the foregoing in mind, including the emphasis placed by Congress on the importance of bona fide, independent music creator participation in the selection of the representatives of its own community on the Mechanical Collective board and committees, SGA poses the following suggestions:

a. That in the process of independently vetting candidate organizations seeking to be designated as the Mechanical Collective, the US Copyright Office carefully consider the diversity of its proposed board and committee members in regard to the following categories:

(i) The inclusion of representatives of foreign music creators, who are expected to be among the largest group of recipients of current and future unmatched royalties; (ii) The inclusion of representatives of independent music creators without any third party recording or music publishing deals, who are also expected to be among the largest group of recipients of currently unmatched royalties;

5 S. Rept. 115-339 see, https://congress.gov/115/crpt/srpt339/CRPT-115srpt339.pdf 6 H. Rept. 115-651 see, https://www.congress.gov/115/crpt/hrpt651/CRPT-115hrpt651.pdf 7 Presidential Signing Statement 2018-013 available at http://www.coherentbabble.com/2018-013.htm 8 NMPA-MLC Initial Comment Submission at 115-125.

7 (iii) Diversity as to race, gender, and creative musical genres among proposed board and committee members; (iv) The individual integrity and absence of conflicts of interest in regard to all board and committee members, and a willingness of each to abide by general Fair Trade Music principles (unless in conflict with statutory requirements).

b. That in the process of independently vetting individual board and committee candidates, the US Copyright Office carefully consider the following criteria in addition to specific mandates under the Act:

(i) The candidate’s potential conflicts of interest, whether in the case of a publishing representative who is employed by a major music publisher or connected to an independent music publisher beholden to a major music publisher by contract (such as though a foreign representation agreement), or, whether in the case of an independent music publisher or music creator who owns, controls or has created one or more musical works that enjoyed great recent popularity and who would be the recipient of substantial unmatched royalties if distributed on a market share basis;

(ii) The candidate’s demonstrated knowledge of the music industry (both domestically and internationally), including a sophisticated understanding of existing accounting systems and databases, and of industry economics across various genres and categories of licensed uses;

(iii) The candidate’s past experience in working on boards of directors, and his or her demonstrated ability to act independently and with resistance to undue influence from conflicted or biased sources in carrying out his or her duties;

(iv) The candidate’s willingness to remain constantly engaged throughout his or her term of service in carrying out his or her duties, including maintaining a current knowledge and understanding of ongoing developments in the music industry; and,

(v) The candidate’s commitment to upholding and championing the principles of fairness, transparency and accountability in all aspects of the Mechanical Collective’s activities, without fear of professional reprisal or disadvantage.

D. Substantial Endorsement and Support

As to the second Mechanical Collective designation criterion, whether the candidate possesses a sufficient level of endorsement and support, it was reported that NMPA declared in February of 2019 that the NMPA/MLC should be considered the presumptive designee as the Mechanical Collective in what amounts to a “no-bid” process, due to its claimed majority status in what NMPA considered to be every category of representation of the music copyright owners and creators that constitute the “licensor market.” NMPA further apparently believed that this

8 obviated the need for a full investigation and analysis by the Register and the Copyright Office of other Mechanical Collective candidates.9

AMLC publicly countered with the following argument shortly thereafter:

The suggestion that only one entity gets to compete -- which, by default, is not a competition -- counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.

As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”

About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.

It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.10

In attempting to independently evaluate the accuracy of these competing assertions as to the issue of support, SGA has not been able to fully fact check the veracity of either set of claims. Nevertheless, it seems highly implausible to SGA that Congress intended that the “licensor market support” criterion be the primary, deciding factor as to whether a full investigation and analysis by the Register and the Copyright Office of each serious Mechanical Collective candidate is necessary. General principles of fairness, transparency and accountability again dictate that such a process is certainly a Congressionally mandated necessity.

That is especially so considering the fact that the vast number of copyright owners yet to be identified in the unmatched searching process are not likely represented by either the NMPA/MLC or the AMLC. Thus, it would be premature in any case for either candidate to declare it has gained the support of a majority of the “licensor market.” The size and scope of

9 See, https://www.digitalmusicnews.com/2019/02/04/nmpa-mechanical-licensing-committee-mlc-mma/

10 See, https://www.billboard.com/articles/business/8499237/american-music-licensing-collective- competition-needed-forming-mma-mlc

9 such market has clearly not yet been identified, nor have its preferences or support for neither, one, or both of the candidates fully been ascertained.

Specific SGA Recommendation Concerning the Issue of Presumptively Substantial Community Support

Sound jurisprudence generally dictates that in evaluating the request of one party for the issuance of “summary judgement” on a particular issue by the fact finder, the fact finder should construe each fact and plausible argument of the other party in the most favorable light. In this instance, SGA believes that the result of that test clearly mitigates in favor of the necessity for further investigation and analysis by the Register and the Copyright Office of each of the two candidates vying to be designated as the Mechanical Collective. SGA therefore recommends that an independent investigation and analysis of the true levels of support for each of the candidates by members of the full “licensor market” be undertaken by the Register and the Copyright Office as soon as possible.

E. Administrative and Technological Capabilities

As to the third criterion concerning administrative and technical capabilities, it is beyond the scope of these comments to compare and contrast the varying abilities of each of the candidates seeking designation as the Mechanical Collective in sufficient detail to be helpful. The determination of whether one or both will be able to meet the requisite demands set forth in the statute is a matter for independent investigation and expert analysis by the Register and the Copyright Office. Each candidate has already submitted extensive information to the Copyright Office on these specific matters, and will likely submit much more in response to the other’s filings.

Nevertheless, SGA would like to suggest some specific questions for each of the candidates regarding the true scope of their abilities and intentions concerning administrative and technological issues.

Specific SGA Recommendations Concerning the Issue of Administrative and Technological Capabilities

SGA suggests that at minimum each of the candidates be requested to address the following issues and questions directly and in detail:

a. Describe the full scope of your capabilities, intentions and plans regarding the process of identifying and distributing presently-unmatched royalties to their rightful copyright owners (including costs associated therewith), and disclose the minimum length of time and level of effort you will expend on such processes prior to declaring any such royalties “permanently unidentifiable.” Each candidate should then be requested commit to such plans in writing, pending good faith ratification by their respective boards of directors.

b. Describe the full scope of your capabilities, intentions and plans regarding the process of

10 establishing and maintaining the Musical Works Database (including costs associated therewith), and disclose the reasons for reliance or not on existing, freely available and/or licensable databases as either a starting point or a method for expedited data enhancement.

c. Explain the substantial discrepancies in expected start-up and maintenance costs and workforce size for the Mechanical Collective, as submitted by each of the candidates.

III. Other Issues of Importance to the Songwriter and Composer Community Under the MMA Further Illustrating the Importance of Integrity and Non-Conflict Regarding the Mechanical Collective’s Board and Committee Members

A. Distribution by Music Publishers of Unmatched Royalties

As noted above, potentially one of the most complex and contentious areas of activity in which the Mechanical Collective will engage is the identification process regarding unmatched musical compositions and the distribution of royalties connected thereto, especially in cases in which the rightful creator and owner of a composition cannot be identified and located. In such instances, the Mechanical Collective will distribute such royalties to copyright owners on a market share basis under the provisions of the Act.

SGA has serious concerns that the Mechanical Collective lacks proper statutory direction as to the details of exactly how this process of unmatched distributions should work, due to the complexities and potential ambiguities within the statutory language itself. Under such circumstances, a Music Collective board consisting of ten music publishers and just four music creators may, without proper oversight, adopt rules and systems designed to obfuscate and compromise the rights of songwriters and composers to properly share in such royalties for the benefit of the board’s largest and most influential music publisher members.

This conundrum illustrates once again the extreme importance of independent analysis and review by the Register and the Copyright Office of prospective Mechanical Collective board and committee members, who must be non-conflicted and independent-minded persons of integrity, knowledge and experience, that can be relied upon to act in ways that fulfill their duties up to the mandated standards of fairness, transparency and accountability set forth in the Act. This is especially true in light of the fact that the MMA specifically eliminated, under the Supremacy Clause of the US Constitution, the rights of states’ attorneys general to enforce escheat laws against those holding “unidentified” music creator royalties. Under such circumstances, it will be up to the members of the Mechanical Collective Board to even more energetically ensure that the rights and interests of songwriters and composers --the very persons in whose interests the MMA was enacted-- are fully respected and protected.11

11 See, http://blog.audiam.com/2019/04/the-one-sentence-in-music-modernization.html

11 Specific SGA Recommendations Concerning the Issue of Unmatched Royalty Distibutions to Music Publisher Copyright Owners, and Subsequent Distributions to Their Affiated Music Creators

In order to avoid a substantial miscarriage of justice in the payment and/or non-payment of unmatched royalties on a market share basis to music publisher copyright owners, and in the subsequent payment and/or non-payment of such royalties by such publishers to their affiliated songwriters and composers, SGA respectfully requests that the Copyright Office convene as soon as possible a series of public discussions among all affected parties for the purposes of commenting on and addressing the following Mechanical Collective unmatched distributions issues (including the issue of selecting Board and Committee members able to fulfill their duties regarding this issue):

1. Solicitation from Mechanical Collective candidates of more detailed explanations as to how such unmatched royalties will be divided (after a sufficiently diligent search for rightful owners proves unsuccessful) among recipients on a market share basis by the Mechanical Collective, including a full description of the methods and details of calculation and reporting on a title by title basis that will be employed;

2. Solicitation from Mechanical Collective candidates of more detailed explanations as to how the Mechanical Collective, in conjunction with the Copyright Office, will as a matter of transparency, accountability and fairness, arrange to place the music creator community on notice that the Collective will be making a distribution of unmatched royalties on each specific date such distributions occur, so that songwriters and composers can be sure they receive their proper shares of such royalties from their affiliated music publishers; and,

3. Very importantly, solicitation from Mechanical Collective candidates of more detailed explanations as to how the Mechanical Collective, in conjunction with the Copyright Office, will as a matter of transparency, accountability and fairness, educate music publishers as to the fact that affiliated songwriters and composers are to be paid their share of such unmatched royalties pursuant to the percentages set forth in the applicable publishing agreements with such affiliated creators, as if such royalties had been received on a title by title basis under such agreements. In this regard, members of Congress were especially diligent (at the urging of SGA and with the assistance of the Copyright Office) in including in the Senate and House Reports for the legislation the following crucial direction:

It is the intent of Congress to ensure that songwriters receive their fair share of monies distributed to copyright owners under subsection (d)(3)(J), while at the same time respecting contractual relationships. To that end, payments and credits to songwriters shall be allocated in proportion to the reported usage of individual musical works by digital music providers during the relevant periods. The 50% payment or credit to a songwriter referenced in subsection (d)(3)(J)(iv)(II) is intended to be treated as a floor, not a ceiling, and is not meant to override any applicable contractual arrangement providing for a higher payment or credit of such monies to a songwriter. (Emphasis added). S. Rept. 115-339 at 14.12 H. Rept. 115-651 at 13. 13

12 See, https://congress.gov/115/crpt/srpt339/CRPT-115srpt339.pdf 13 See, https://www.congress.gov/115/crpt/hrpt651/CRPT-115hrpt651.pdf

A failure by the Mechanical Collective to educate music publishers of their obligations in this regard could result in the music creator community as a whole being subject to losses of tens of millions of dollars per year, and perhaps hundreds of millions of dollars in the initial distributions of currently unmatched and held royalties. That is certainly not the result Congress intended, as evidenced by its expressed concerns regarding this very important matter. SGA therefore urges the Copyright Office to take the lead in publicly highlighting this issue.

B. Safe Harbor for Past Infringers and the 5th Amendment Takings Clause

In part as a result of the recent decision by the digital music distribution companies Google, Spotify, Amazon and Pandora to file judicial appeals of the US Copyright Royalty Board’s recent mechanical rate setting decisions,14 there has been renewed discussion over the Constitutionality of Section 102(d)(10)(A) of the MMA. That section purports to bestow upon those and other digital distribution companies an exemption from certain liabilities and damages for past infringing activity (including statutory damages) in suits filed on or after the date January 1, 2018.

Specifically, the question of whether Section 102(d)(10)(A) is violative of the so-called “takings clause” of the Fifth Amendment to the US Constitution has been put forward by several leading copyright scholars, including attorney Richard Busch, who represents several members of SGA in their private, individual, ongoing lawsuits against Spotify filed prior to the January 1, 2018 deadline set forth in the Act. The potentially applicable clause of the Fifth Amendment to the US Constitution reads: "private property [shall not] be taken for public use, without just compensation."

According to Mr. Busch, in a public statement he made in 2018, “it is well established that a copyright infringement cause of action is a property right that vests at the time of the infringement — whether a lawsuit has been filed or not. Limiting damages retroactively if a lawsuit has not yet been filed may very well be unconstitutional.” 15

This issue is of particular importance to those independent music creators who were not given an opportunity to be present or represented in the negotiations that took place regarding the drafting of the bill. In a recent Twitter comment, one of the NMPA-affiliated music creator representatives who apparently may have been present and/or participated in such meetings at the invitation of NMPA (and who is now nominated for an NMPA/MLC committee position), made the following revelation:

14 See, https://www.billboard.com/articles/business/8502707/why-spotify-appeal-crb-rate-decision-huge-deal- songwriters-publishers 15 See, https://www.digitalmusicnews.com/2018/01/19/spotify-music-modernization-act/

13 “With the #MusicModernizationAct, songwriters agreed not to sue @spotify out of existence in exchange for some basic fairness in their business practices. Their current behavior shows they negotiated in bad faith, which is not generally great for business. We’ll see, I suppose.” 16

SGA would like certain clarifications of the facts underlying this tweet, including whether the author is implying that NMPA-affiliated songwriters (most if not all of whom SGA believes had already settled copyright infringement claims they may have had against Spotify and other distributors through a variety of private industry settlements negotiated by the music publishing community), formally negotiated away the rights of other music creators who had not yet brought or settled their claims against Spotify and the others. Was this concession formally negotiated in exchange for promises that Spotify (and potentially the other distributors) would engage in “basic fairness in their (sic) business practices?” Was such agreement memorialized in a written document or exchange of correspondence with Spotify and other of the digital distributors, and if not, why not? Further, why weren’t those music creators whose rights were being bargained away consulted on this matter, instead of being shut out from the closed-door negotiations?

In light of the foregoing, SGA finds it especially ironic that the songwriter group of which the above author is a founding member, purports to have recently sent the following statement to the US Copyright Office which among other claims, criticizes the efforts of some in the music creator community to sound alarms about rushing to judgement in the designation of the Mechanical Collective:

Their default position is to spread fear by playing upon an old and tired trope about cigar- smoking, greedy major publishers - ready to obfuscate and pounce on a writer's hard- earned money at every turn. We, however, have worked closely with the publishing community throughout the MMA process and know that is simply not the reality.17

In so far as SGA can determine, the public debate on the many issues raised by concerned music creators with legitimate questions and concerns about the MMA has been factual, and not in any way based on innuendo or fear-mongering. To suggest otherwise in formal comments seems to be a fairly good example of employing the “pounding on the table” strategy, when the facts, the law, and history don’t seem to support the point of view one is trying to promote.

The independent songwriter and composer community has a right to know the answers to the questions raised above and throughout these comments, and hopes to rely upon the Register to ascertain this information as part of the comments, investigation and verification process currently being undertaken. Further, any music creator or music publisher-affiliated person who participated directly in legislative negotiations and is now seeking to be authorized to serve on a board or committee of a Mechanical Collective candidate should be interviewed by the Register and the Copyright Office regarding such prior activity to ensure that

16 See, https://twitter.com/kayhanley/status/1117174896587464704?s=21 (excerpt attached at the end of these comments as SGA ATTACHMENT A) 17 https://www.billboard.com/articles/business/8508007/songwriters-north-america-mlc-copyright-office-comment- letter

14 principles of non-conflict were properly observed by such person and by the candidate seeking to be designated as the Mechanical Collective in general.

Specific SGA Recommendations Concerning the Issue of Constitutionality of Section of the MMA Under the Takings Clause of the Fifth Amendment

In addition to the questions posed immediately above, SGA believes that the question of the Constitutionality of Section 102(d)(10)(A) of the MMA is of such a crucial nature to the protection of the rights of American music creators that it would be more than appropriate for the US Copyright Office to convene a panel of experts on all sides of the issue to engage in a public discussion of the matter. SGA therefore urges the Register to consider doing so as soon as possible, and will be pleased to participate in such a public discussion if so requested.

IV. Conclusions

SGA extends its sincerest thanks to the Register of Copyrights, the Librarian of Congress, and the US Copyright Office for the opportunity to submit these comments on issues of extraordinary importance to every music creator in the United States and throughout the world. Please do not hesitate to call on us for further information or input. We welcome the opportunity to continue our participation in every aspect of this legislative implementation process, and invite you to keep us apprised of all further developments in this regard.

Respectfully submitted,

//Charles F. Carnes//

Charles F. Carnes President Songwriters Guild of America, Inc.

April 22, 2019 cc: Charles J. Sanders, Esq., Outside Counsel Members of The SGA Board of Directors

CFC:sga Encl.

SGA ATTACHMENT A

Retweet

Direct message

Kay HanleyVerified account @kayhanley FollowFollow @kayhanley Replying to @imanmazhar18 @Spotify @wearesonaLA With the #MusicModernizationAct, songwriters agreed not to sue @spotify out of existence in exchange for some basic fairness in their business practices. Their current behavior shows they negotiated in bad faith, which is not generally great for business. We’ll see, I suppose. 2:17 PM - 13 Apr 2019 from Los Angeles, CA

16 ATTACHMENT C MLC Selects as “Digital Services Provider” the Company that Sent Frau... https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services-pro...

The Trichordist Artists For An Ethical and Sustainable Internet #StopArtistExploitation

RSS Feed Twier Facebook

November 27, 2019

MLC Selects as “Digital Services Provider” the Company that Sent Fraudulent License Notices to Songwriters

The picture above shows dozens of backdated “NOIs” for compulsory mechanical licenses sent to me by HFA in 2016. By purporting to be valid NOIs for licenses when they were not, HFA commied mail fraud.

Music Row is reporting (hps://musicrow.com/2019/11/mechanical-licensing-collective-announces-leadership-post-data-portal- vendors/) the music licensing collective board of directors has selected HFA as a digital service provider:

1 of 4 12/20/2019, 9:43 AM MLC Selects as “Digital Services Provider” the Company that Sent Frau... https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services-pro...

Technology company ConsenSys and mechanical licensing administrator Harry Fox Agency(HFA) received unanimous approval from the MLC Board to become the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and onboarding songwriters, composers, lyricists, and music publishers and their catalogs to the database.

The problem is that HFA was the 3rd party licensing contractor hired by Spotify and other streaming services to obtain licenses from songwriters and publishers. HFA did not properly do their job leaving streaming services exposed to massive copyright infringement lawsuits (from people like me). They created the problem that led to the creation of the Music Licensing Collective so now they are rewarded with the contract to run the matching of musical works and paying artists?!?! Didn’t they just fail spectacularly when asked by Spotify to do this job? Didn’t the Spotify class action and the four other private lawsuits prove HFA incapable of doing the job?

Even worse, in order to aempt to cover up the mess, they sent me, many fraudulent “Notices of Intent” or NOIs that purported to execute the federal compulsory mechanical license. They were not valid as they were backdated to make it appear they had sent the notices before the songs were streamed. I regret now that we didn’t pursue a RICO case against these folks when we were pursuing the copyright infringement cases against the streaming services. (See the screenshots below.)

Here’s what the DOJ says about mail fraud.

940. 18 U.S.C. SECTION 1341—ELEMENTS OF MAIL FRAUD

“There are two elements in mail fraud: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or aempting to execute, the scheme (or specified fraudulent acts).” Schmuck v. United States, 489 U.S. 705, 721 n. 10 (1989); see also Pereira v. United States, 347 U.S. 1, 8 (1954) (“The elements of the offense of mail fraud under . . . § 1341 are (1) a scheme to defraud, and (2) the mailing of a leer, etc., for the purpose of executing the scheme.”); Laura A. Eilers & Harvey B. Silikovi, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 704 (1994) (cases cited).

Oh and one more thing. HFA was the company that was supposed to pay these streaming royalties back out to the songwriters. They didn’t do that either. Where is that money? Shouldn’t the Copyright Oﬃce look into this?

This is a travesty. The members of the MLC and those that purport to represent songwriters (I’m looking at you NSAI, SONA) have some serious explaining to do to songwriters. This company was one of the main reasons songwriters didn’t get their mechanicals for 7 going on 8 years. What the fuck were you guys thinking?

2 of 4 12/20/2019, 9:43 AM MLC Selects as “Digital Services Provider” the Company that Sent Frau... https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services-pro...

3 of 4 12/20/2019, 9:43 AM MLC Selects as “Digital Services Provider” the Company that Sent Frau... https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services-pro...

Posted by Dr. David C Lowery in Artist Rights

About Dr. David C Lowery

Platinum selling singer songwriter for the bands Cracker and Camper Van Beethoven; platinum selling producer; founder of pitch- a-tent records; founder Sound of Music Studios; platinum selling music publisher; angel investor; digital skeptic; college lecturer and founder of the University of Georgia Terry College Artistsʹ Rights Symposium. View all posts by Dr. David C Lowery →

Blog at WordPress.com.

4 of 4 12/20/2019, 9:43 AM ATTACHMENT D (https://www.digitalmusicnews.com)

 TRENDING  Jerry Garcia Estate Launches a Cannabis Brand, Fans Aren’t Exactly Thrilled (https://www.digitalmusicnews.com/2019/12/16/jer…  

Home (https://www.digitalmusicnews.com)  Legislative (https://www.digitalmusicnews.com/category/legislative/)

Mechanical Licensing Collective Hands a Juicy Contract to HFA — Critics Call the Deal Crooked

 Paul Resnikoff (https://www.digitalmusicnews.com/author/presnikoff/)  November 27, 2019

 11 (https://www.digitalmusicnews.com/2019/11/27/hfa-mechanical-licensing-collective-contract/#comments)

(https://www.digitalmusicnews.com/wp-content/uploads/2018/09/us-capitol.jpg)

The newly-minted — and funded — Mechanical Licensing Collective has just awarded a plum contract to the Harry Fox Agency, owned by private equity rm the Blackstone Group. Critics are quickly pointing to a ‘no-bid contract’ based on political horse-trading, with HFA assailed for serious licensing problems in the past.

The HFA award was formally announced this week, with the Mechanical Licensing Collective (MLC) now granting lucrative contracts and coveted positions following its monstrous initial budget grant (https://www.digitalmusicnews.com/2019/11/14/mechanical-licensing-collective-mlc-62- million/). Also receiving a choice bid was ConsenSys (https://consensys.net/), an Ethereum blockchain-focused tech play.

“Technology company ConsenSys and mechanical licensing administrator Harry Fox Agency (HFA) received unanimous approval from the MLC Board to become the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and onboarding songwriters, composers, lyricists, and music publishers and their catalogs to the database,” the MLC emailed DMN.

Privacy - Terms / The awards follow an extremely lucrative funding award of $62 million (https://www.digitalmusicnews.com/2019/11/14/mechanical-licensing- collective-mlc-62-million/), which only carries the MLC for one year past its launch date of January 1st, 2021. Major publishers like Universal Music Publishing Group, Sony/ATV, Warner/Chappell, and Downtown Music Publishing are undoubtedly giving kudos to NMPA topper David Israelite for that healthy tranche, with one streaming negotiator suering from ‘mere exhaustion’ against the ‘unmedicated’ but ferocious Washington-based negotiator.

Amazingly, another major streaming service complained that the MLC’s initial $66.25 million budget was ‘at least three times (https://www.digitalmusicnews.com/2019/10/30/mlc-streaming-million-budget/)‘ the cost of running a mechanical licensing agency, according to their estimates. But streaming services seem willing to pay a premium for an end to the endless copyright liabilities.

Now, it’s time to start spending. Though not before a few favors are repaid.

MLC Board chair Alisa Coleman pointed to an exhaustive selection process, though numerous sources pointed DMN to a backroom, ‘no bid contract’ deal based on earlier accords with the powerful Blackstone Group. “After completing a rigorous evaluation process, HFA in collaboration with ConsenSys is the clear choice to ensure that the MLC has a solid platform to deliver on its mission,” Coleman relayed.

MORE NEWS: Zoe Keating Oers More Evidence That Spotify Royalties Are Declining

“These vendors will successfully help the MLC deliver not only what is required under the MMA, but also improve the overall mechanical licensing process in the United States.”

Sounds fair, though competing vendors probably didn’t stand a chance. Last month, a top executive at one of the largest streaming services tipped Digital Music News to the HFA award. The source, who was involved in extensive negotiations over the initial funding amounts (paid by the streaming services), promised DMN that “HFA will get their contract” based on earlier horse-trading involving Blackstone, a powerful lobbyist that nearly scuttled the entire Music Modernization Act (MMA) over concerns tied to HFA and its sister company, SESAC.

As the MMA steamrolled towards approvals in both Congressional chambers, sources noted that Blackstone quickly feared the extinction of its two music properties. HFA, a company blamed — fairly or unfairly — for creating an enormous mess related to unpaid streaming mechanicals, looked easily replaced by the MLC, while SESAC, a smaller performance rights organization, was supremely threatened by an MLC that was likely to spread beyond mechanical licensing.

The result, according to sources with knowledge of the backroom dealings, is that the NMPA agreed to narrow the scope of the MLC’s responsibilities while promising a juicy HFA contract ahead. Which is exactly what happened this week.

Among the sharp critics of the award is vocal artist advocate David Lowery, who abruptly quit the Mechanical Licensing Collective for unknown reasons.

Lowery has been a huge thorn in the sides of several heavyweight streaming services, not to mention major publishers. He spearheaded the rst lawsuits against streaming services for non-payment of mechanical licenses, while outing HFA for massive underpayments, mismatches, and at- out fraud. Lowery helped to provoke the crisis that ultimately led to the passage of the MMA and its resolutions around mechanical licensing moving forward.

MORE NEWS: The Top 40 Most Popular Songs of All Time, According to YouTube

Lowery declined to oer a reason for his MLC exit. Though maybe this had something to do with it.

“The problem is that HFA was the third-party licensing contractor hired by Spotify and other streaming services to obtain licenses from songwriters and publishers,” Lowery wrote on his site, The Trichordist (https://thetrichordist.com/2019/11/27/mlc-selects-as-digital-services- provider-the-company-that-sent-fraudulent-license-notices-to-songwriters/), earlier today. “HFA did not properly do their job leaving streaming services exposed to massive copyright infringement lawsuits (from people like me). They created the problem that led to the creation of the Music Licensing Collective so now they are rewarded with the contract to run the matching of musical works and paying artists?!?!”

“Didn’t they just fail spectacularly when asked by Spotify to do this job? Didn’t the Spotify class action and the four other private lawsuits prove HFA incapable of doing the job?”

Lowery was once the frontman for successful 90s group Cracker. So he experienced the mechanical meltdown rsthand — and he solidly blames HFA for the mess. “HFA was the company that was supposed to pay these streaming royalties back out to the songwriters. They didn’t do that either. Where is that money? Shouldn’t the Copyright Oce look into this?

“This company was one of the main reasons songwriters didn’t get their mechanicals for 7 going on 8 years. What the fuck were you guys thinking?” Privacy - Terms / Also slamming the decision is Je Price of Audiam, owned by Canadian rights organization SOCAN.

In comments to the U.S. Copyright Oce submitted ahead of the selection of HFA, Price pointed to an uncanny competitive advantage enjoyed by HFA. All of which is seriously bad news for mechanical competitors like Audiam.

MORE NEWS: Slash Says Streaming Is 'Denitely Not Doing Any Favors for the Actual Artists'

“As a vendor to the MLC, HFA would now have unique and unfettered access to all music streaming data including, but not limited to, a list of every musical recording distributed with all the associated metadata, a list of every registered music publisher, songwriter, the data points connecting recordings to the composition, stream counts and revenue earned by every musical works owner, creator and administrator around the world, giving them a unique un-replicable competitive advantage in the private market against other privately held companies.

“In eect, based on their own admission as to the value of the data, and their articulation of how they intend to compete in this market space, their designation as a vendor to the MLC will allow HFA to know whom to solicit, how much each entity earns and streams, what compositions each entity represents, how to contact each entity, what each entities annual value is, and more.“

Sounds good for Blackstone, whose once-struggling HFA is now surging back from the brink — and suddenly enjoying a coveted catbird seat in the mechanical licensing space.

Looking ahead, at least two sources have promised an upcoming award to SoundExchange and its SXWorks division (https://www.sx-works.com/).

“They’ll get their piece [of the MLC budget],” one exec at a streaming service promised. That’s perfect news for SoundExchange CEO Michael Huppe, who — despite an extraordinary ‘non-prot’ salary north of $1.4 million (https://www.digitalmusicnews.com/2019/01/17/soundexchange- non-prot-millions/) — is now weathering serious long-term challenges for SoundExchange and its non-interactive recorded music licensing focus. Most notably, Huppe’s SoundExchange lost a critical client, Pandora, which pulled a large portion of its licensing duties away from the agency for reasons reportedly tied to large administrative overhead and processing problems.

More as this develops. Written while listening to FKA twigs and Slaine.

NOW PLAYING

Privacy - Terms / ATTACHMENT E 12/20/2019 Copyright Office Should Establish Conflict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - Hypebot

Music Business Music Tech DIY Charts Other More News Search Hypebot

MAJOR LABELS Follow Us on  

In this piece, Chris Castle weighs in on why the Copyright Ofce should put in place a conict of interest policy for the recently passed Music Modernization Act’s Musical works database.

______

Guest post by Chris Castle of Music Technology Policy

[This post originally appeared in the MusicTechPolicy Monthly Newsletter before the announcement of the MLC vendors.] Advertise o

Title I of the Music Modernization Act is clear about a few things, one of which is the creation of the “musical works database.” That database is for a specic purpose-it is to be used by the mechanical licensing collective in fullling its statutory mandate to “collect and distribute royalties from digital music providers for covered activities” under the new blanket license. Among other things, the MLC is also mandated to “[a]dminister a process by which copyright owners can claim ownership of musical works (and shares of musical works)”.

But the MMA also establishes a cohort of “special” people who can get copies of the entire database, a “bulk copy.” And there’s the conict of interest rub. Not to mention the data integrity rub because as you’ll see, the last TRENDING POSTS thing the Congress wants is to have inconsistent “ofcial” databases oating around the ether, each claiming to be authoritative and more authoritative than Most Inuential M 12,882 views | 114 co the next. (Without, of course, undermining competition for accuracy or efciency with the “ofcial” database.) Can Music Stores The Big Distribut 10,449 views | 7 com Authority of the Copyright Ofce to Create Database Conict of Interest Rules 7 Performers Wh Masterpieces wit As the legislative history teaches us, the Congress is taking a critical look at how 6,894 views | 9 comm the musical works database is in fact utilized. Congress is also onto the old Adding Lyrics To database arbitrage rope a dope: “Music metadata has more often been seen as a 5,221 views | 2 comm competitive advantage for the party that controls the database, rather than as a What Happens W resource for building an industry on.” (H.R. Rep. No. 115-651 and S. Rep. No. 115- Instagram Follow 339, at 8.) 4,673 views | 9 comm How Much Does Unsurprisingly, Congress also empowered the Copyright Ofce with the authority Playing A Concer 4,486 views | 10 com 24 to establish regulations regarding “usage restrictions of the musical works Shares https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish-conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html 1/6 12/20/2019 Copyright Office Should Establish Conflict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - Hypebot database.” The Copyright Ofce could take up that issue in the current How To Make Co On Spotify, Apple rulemaking. As the Copyright Ofce noted in the notication of inquiry for MMA 3,406 views | 5 comm regulations, “[t]he Ofce seeks public input on any issues that should be The TikTok Algor considered relating to the oversight of the MLC, including but not limited to 3,349 views | 1 comm conicts of interest….” 84 Fed. Reg. 49966 (No. 185 Sept. 24, 2019). 5 Steps For Send Submission The musical works database is to be used for a specic purpose to further the 2,879 views | 2 comm permitted work of the MLC and to be a national asset that is the denitive PledgeMusic Boa resource for copyright ownership of songs. Congress did not intend for the Guilty To Fraud database to be a leveraged byproduct of Title I that would allow special people 2,709 views | 2 comm special privileges. The integrity of both the data and the database is of great importance to Congress and to the Copyright Ofce.

It is also clear that nothing in the MMA grants to anyone any ownership right to the musical works database or any data acquired in its establishment, not MLC, DLC or anyone receiving a copy. Neither does MMA grant any right to sell or resell that data. The Copyright Ofce clearly has an oversight role for any sales, a role the Congress takes seriously based on the legislative history as well as a host of public statements by Members and Senators.

So it will be entirely within the brief of the Copyright Ofce to establish rules to protect the public against both threats to database integrity and efforts at database arbitrage. (In the eminently readable MMA, you will nd this at 17 USC Sec. 115(d)(ii)(D)(bb)(E)(v) “Accessibility of Database” for those reading along.)

Who Can Get a Copy of the Entire Musical Works Database?

Title I requires that when established, the musical works database “shall be made available to members of the public in a searchable, online format, free of charge.” R Users of the blanket license, among others, are to get a free copy of the database in a “bulk, machine-readable format”. This language appears to draw a distinction between members of the public looking things up onesey and twosey compared to getting a copy of the entire musical works database.

Congress clearly was drawing a distinction between casual users in the public and those whose needs relate to the operation of the blanket licensing system- users who are already paying for the creation of the database through the administrative assessment and don’t want to pay twice.

Fine so far, although given the siloed nature of reporting and accounting systems at the music services it remains to be seen just how much any of them would actually use a copy of the musical works database unless that “machine-readable format” was highly customized. The cost of that customization would seem a cost more appropriately borne by the entity requesting the copy rather than socialized across all licensees.

The Vendor Conict

But-Title I goes further. And here is where the need for the Copyright Ofce to 24 develop conict of interest rules becomes acute. Shares https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish-conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html 2/6 12/20/2019 Copyright Office Should Establish Conflict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - Hypebot “Authorized vendors” of users of the blanket license are also entitled to a copy of the database free of charge, but anyone not a user or a vendor of a user can pay for a copy of the database. That’s consistent as far as it goes because vendors of users are working for someone who pays for the MLC under the administrative assessment (and indirectly pays for the establishment and maintenance of the database) and others do not. Again, given that those vendors run existing systems that already talk to the systems of the licensees, the jury is out on just how many will want or be able to use this “free” copy as a practical matter. Even so, what should not happen is that the data standard sinks to the lowest common denominator to accommodate a vendor’s legacy systems (#nofoxpro #nodos).

However, Congress drew a sensible distinction between (1) those who pay the administrative assessment or their vendors and (2) those who do not. Congress is clearly making that distinction to fairly match benets with burdens.

What Congress did not intend was for vendors of users to acquire a free copy of the musical works database that they then could use for their own purposes unrelated to the work these vendors performed for users under the blanket license that justied their free copy in the rst place.

Neither did Congress intend to require songwriters and music publishers to be forced–as a condition of receiving payment of statutory royalties–to allow their song data to be transferred or licensed by the MLC to a vendor for the vendor’s own purposes as a quid pro quo. An example could be inadvertently requiring overly broad terms of service or terms of use inserted in a click-through agreement as a condition for registration for the MLC’s claiming platform.

It also seems clear that if vendors of the MLC are to obtain their own copy of the database they would be treated like anyone else. They would be included in the group that must pay a fee for a copy of the musical works database “not to exceed the marginal cost to the mechanical licensing collective of providing the database to such person or entity”. Congress could easily have given those vendors a free copy as they did with the vendors of users but didn’t. (It seems that the situation may actually be going the other way–vendors are selling their data to the MLC.)

Extracting Data from Indie Labels

It is important to note that Title I also empowers users of the blanket license to obtain from indie labels all their song information, or use “[g]ood-faith, commercially reasonable efforts” to do so. Do such efforts include suing to get the data? Must the label bear the cost of providing the data? Does this include updates? Does the label warrant the accuracy of their data when used for a purpose for which it was not collected? If the licensee must use “commercial reasonable efforts” to do so, does that imply that the label need not provide the data if it is not commercially reasonable to do so? Is charging a market price reective of the cost of the data to the label as well as updates commercially reasonable? Is this another “taking,” this time from labels?

Congress clearly states that anyone purchasing a bulk copy of the musical works database must pay the marginal cost to the MLC. But who pays the labels for the cost of the label data that is to be included in the musical works database and 24 then sold by the MLC? Do the labels get compensated? At what price? Shares https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish-conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html 3/6 12/20/2019 Copyright Office Should Establish Conflict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - Hypebot Clearly the Congress did not intend to set up a free rider issue here, so this is another area that is ripe for regulation.

Reselling the Musical Works Database

There is nothing in the statute that allows those obtaining a copy of the musical works database to resell that database or services derived from that database, including when those services do not relate to the purpose for which the database copy was obtained. Neither does MMA permit the subsequent distribution, alteration, sale or reproduction of a permitted copy, i.e., all such copies must originate with the MLC as required by the statute. In fact, Congress addresses the issue by allowing the Copyright Ofce to restrict such arbitrage.

Neither does the MMA restrict how a copy of the musical works database once purchased is to be valued on the books of the buyer, or whether it can be transferred to a new owner in the sale of that business or pledged as collateral. Again, important issues for the Copyright Ofce.

Issue Spotting the Conicts

The transfer back and forth of all of this data seems to create exactly the kind of moral hazard that cries out for conict of interest rules of the road to accomplish the proper goals of Title I. This would, of course, have to prohibit co-mingling of existing data of a vendor with data acquired during the normal course of that vendor’s services. This is easy to accomplish through the use of a clean room and is a best practice and common procedure in the tech industry (e.g., former employees with knowledge of competitor IP or business practices).

Clear conict of interest rules would assure Congress that their mandate is not creating unintended enrichment of any particular vendor capturing data while working for either the MLC or users of the blanket license.

One might say that song data acquired by the MLC is just information that was essentially public anyway (we’ve heard that kind of argument before) so why restrict it. I would suggest that argument is a bit of a dodge because even if true, the vendors didn’t in fact get the data through public means as available to anyone else as it was to them. They got it because the statute required the information be given up in order to enjoy rights of a copyright owner-not to create an arbitrage opportunity. All the more reason why conict of interest rules are essential.

And of course such regulations would give the public comfort that the entire supply chain had proper oversight and transparency as well as a corrective remedy should anything go astray.

Therefore, it is entirely within the mandate of the Copyright Ofce to establish conict of interest and data integrity rules of the road for all concerned.

Conict of interest rules would address and require:

-Prior approval by the Copyright Ofce of any terms of service or terms of use that rights owners are required to click through in order to obtain their statutory 24 Shares https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish-conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html 4/6 12/20/2019 Copyright Office Should Establish Conflict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - Hypebot royalties or other benets, including registering with the MLC, claiming black box monies, or purchasing a bulk copy

-Notication of the Copyright Ofce of each copy of the musical works database distributed.

-The Copyright Ofce could easily publish that notication in the Federal Register for transparency. Any transfer documents should be recorded with the Copyright Ofce and made available to the public for search

-“Flow down” language from the Copyright Ofce that must be included preemptively in any click through-agreements to insulate users

-Disclosure of pre-existing data held by vendors rendering services

-Disclosure of data submitted by rights owners (including labels) to the MLC that is made available by the MLC to its vendors

-Establishing a fee schedule of sums to be paid to rights owners (including labels) providing data

-Prohibitions on pledging the musical works database as collateral

-A mechanism for copyright owners (including labels) to opt out of being included in any copies of the musical works database transferred to vendors or sold to others

-Establish restrictions on ownership of the musical works database (which might come in handy if it is necessary for the Copyright Ofce to designate a new MLC)

-Clarifying the Copyright Ofce FOIA policy as it relates to the database

-Prohibiting co-mingling pre-existing data with copies received

-Prohibiting modication of permitted copies of the database (for the obvious reason of maintaining the integrity of the MLC as the authoritative source)

-Requiring all copies of the database be watermarked with origination and destination

All these guideposts are compassed by the Copyright Ofce mandate and should not require any amendments to the MMA. If these issues remain unaddressed, I fear a real mess consistent with that old legal principle snafu fugazi fubar.

Owen Davie on 12/13/2019 in Major Labels | Permalink | Comments (2)

Tags: copyright, legal, MMA, Music Modernization Act

Share on:   

2 COMMENTS

Pingback: Copyright Ofce Should Establish Conict Of Interest Policy For The MMA Musical Works Database [Op-Ed] - SMTM RECORDS

24 Shares https://www.hypebot.com/hypebot/2019/12/copyright-office-should-establish-conflict-of-interest-policy-for-the-mma-musical-works-database-op-ed.html 5/6 ATTACHMENT F